SEBI abolishes transaction fee payouts to Mutual Fund distributors

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  • Last Updated on 12 August, 2025

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SEBI mutual fund distributors transaction fee AMC remuneration SEBI regulation changes MF distribution charges

Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/115, Dated 08.08.2025

1. Existing Norms on Transaction Fees


Under the earlier regulatory framework, Asset Management Companies (AMCs) were permitted to pay a transaction fee to Mutual Fund (MF) distributors for subscriptions exceeding ₹10,000. This was intended as an incentive for distributors to facilitate large-ticket investments in mutual fund schemes.

2. SEBI’s Decision to Abolish Transaction Fees


In a recent move, SEBI has abolished the provision allowing such transaction fees. This change effectively means AMCs will no longer be required to pay separate distribution charges to MF distributors for large-value subscriptions.

3. Clarification on Distributor Remuneration


SEBI has clarified that MF distributors, being agents of the AMCs, are already entitled to remuneration from the AMCs in the form of commissions or other agreed payments. Therefore, an additional transaction fee for large investments was deemed unnecessary.

4. Impact on Mutual Fund Industry Practices


With the removal of these charges, the distribution model may become more streamlined and cost-efficient for AMCs, while also ensuring that investors’ funds are not indirectly impacted by redundant distribution costs. This move aligns with SEBI’s ongoing efforts to simplify and rationalise mutual fund fee structures.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied